I’m back. It’s been a long time since last I blogged, but
the summer is no time for any of us to slow down; certainly not entrepreneurs.
And especially not young entrepreneurs.
Speaking of which, I just came across a new website
dedicated to getting young entrepreneurs – really young people in general – off
the ground. It’s called Upstart and the
basic idea is to let young people raise capital in exchange for a small share
of future earnings.
Note the above “future earnings”, that’s key to the Upstart
model. According to the web site: “Upstarts share a set percent of income with
their backers over 10 years. Payments are waived for years in which the upstart
is in school or earning less than $30,000, but an extension year is added, up
to a total of 15 years. Upstart Network collects monthly payments and
reconciles each upstart’s income annually via their US tax returns. Total payments
are capped at 5 times the initial amount raised.”
Note the upstart, him or herself, will repay the money
whether or not the original goal is met. The business might fail; no matter the
investors still get paid.
By the way, Upstart seeks to fund anyone who has graduated since
2008, not just entrepreneurs; so some of the candidates for funding are seeking
to retire student debt. Others are seeking funds to learn coding or another
marketable skill. But most are trying to launch businesses. The range is
interesting as well. There is one
attempting to put together a Google Glass app for healthcare. Another is trying
to build a socially responsible clothing company. And on and on and on.
So it’s crowdfunding with a twist. The site proclaims a goal
of 8% returns, who knows? It’s just another example of the incredibly fertile
ground for young people today in the world of startups, er upstarts.
